e-Revenue Queensland Issue 5 June 2008

Increased concessions – first home buyers
Queensland’s current transfer duty exemption for first home buyers purchasing a home valued at up to $320,000 represents a saving of up to $9,675 compared to the duty payable by purchasers who do not receive a concession. The 2008-09 Budget increases the first home buyer transfer duty exemption to $350,000 from 1 July 2008, providing further savings of up to $1,650 for those purchasing their first home. In addition, from 1 September 2008 the first home buyer transfer duty exemption will be increased to $500,000, providing savings of up to $9,500 when compared with the current schedule.

Increased concessions – homebuyers
Queensland currently provides a principal place of residence concession by applying a 1% rate to the first $320,000 of the value of the home.  Based on the current duty rates, this represents a saving of up to $6,475 for those purchasing their own home, other than their first. The 2008-09 Budget increases the principal place of residence concession to the first $350,000 of the value of the home from 1 July 2008. This provides further savings of up to $750 for those purchasing their own home, other than their first.

Revised transfer duty rate structure
The 2008-09 Budget revises and simplifies the transfer duty rate structure and generally improves competitiveness with other states. The number of rate bands will be reduced from seven to five from 1 July 2008, with the highest marginal rate increasing from 4.50% to 5.25%. The combination of the new transfer duty rate schedule and increased thresholds for homebuyers will mean lower duty payable for homebuyers purchasing homes valued at between $320,000 and $1 million and those purchasing property other than homes valued at up to $590,000.

Abolition of mortgage duty
The 2008-09 Budget also brings forward the abolition of mortgage duty to 1 July 2008, six months earlier than scheduled, providing benefits for Queensland homebuyers, investors and businesses taking out a mortgage.

Concessions to assist older persons
A package of concessions to assist older persons has been introduced, including:

• extending the transfer duty home concession to retirement village residents who adopt lease and sub-lease occupancy arrangements
• providing a land tax exemption for aged care facilities, which will complement the existing exemption for retirement villages
• reducing the application of the provision that provides for retrospective assessment of land tax on the subdivision of a principal place of residence.

Land tax relief package
The 2008-09 Budget continues the Government’s program of land tax relief and simplification through the revision and simplification of the land tax schedules. From 1 July 2008, the number of rate bands will be reduced from five to three for resident individuals and from four to two for companies, trustees and absentees. The amount of tax payable at the land tax threshold will be reduced from $1,200 to $500 for resident individuals and reduced from $2,250 to $1,450 for companies, trustees and absentees.

Payroll tax deduction extension
The 2008-09 Budget further improves the competitiveness of Queensland’s payroll tax regime by extending the $1 million deduction such that it phases out at a rate of $1 in every $4 of taxable wages above the threshold, rather than $1 in every $3. This will provide a benefit to all businesses with taxable wages between $1 million and $5 million.

For more information

• For more information, including tables presenting new and current rates and schedules, refer to Chapter 5 of Budget Paper 2, available through the 2008-09 Budget website.

Important points to remember are:

• the June periodic return (due 7 July) must be lodged before an annual return can be completed
• all registered pay-roll tax employers must lodge an annual return no later than 21 July.

To lodge an annual return online, select the ‘lodge online’ option under the pay-roll tax section of OSR’s website, work through each section of the form and then submit your return.

If your are unable to lodge online, please call the OSR Client Contact Centre on 1300 300 734 to request a paper annual return.

New online feature helps with periodic returns 

The pay-roll tax online service now includes a new assessment information screen which enables employers to view their assessed liability history for the current financial year.

Booklets of periodic returns will no longer be sent to employers unless requested.  Payment reference numbers for periodic returns can now be obtained from the new assessment information screen on the OSR website.

For more information

Visit the pay-roll tax section of the OSR website 
Subscribe to pay-roll tax email alerts 
Call our Client Contact Centre on 1300 300 734.

OSR uses data matching and other measures to identify home concession claims where applicants may no longer be eligible.  Additional duty, significant penalties and interest may apply in these circumstances.  In cases where an offence has been committed, taxpayers may be prosecuted.

Professional advisors can help ensure their clients receive their correct entitlements by:

• asking clients who are buying and/or selling a home about any properties for which they have previously claimed a home concession
• advising clients that they must notify the Commissioner of State Revenue within 28 days of any changes in their circumstances that may affect their eligibility for the concession.

More detailed information on eligibility requirements including occupancy requirements can be found on the duties home concession section of the OSR website.

Professional advisors who have a client that is no longer eligible for the concession can submit a Form OSR – D2.4 Reassessment – home transfer concession to OSR on behalf of their client. Voluntary disclosures are ordinarily treated with lower penalties than breaches identified through the compliance program.

For more information

• View a detailed Transfer duty – concession for homes information sheet
• View the duties home concession compliance program information in the transfer duty section of the OSR website 
• Refer to Revenue Ruling DA1.2 Concessions for homes and first homes – residential purposes 
• Refer to Revenue Ruling DA2.2 Concessions for homes and first homes – occupancy requirements 
• Call our Client Contact Centre on 1300 300 734.
  

Concessions are provided for land used as your principal place of residence and for the business of farming. Penalties may apply if you fail to advise OSR of any changes to the use of the land which may affect your current concession.

For more information

• Visit the land tax section of the OSR website
• Subscribe to land tax email alerts 
• Call our Client Contact Centre on 1300 300 734.

Important harmonisation changes include:

• New provisions for relevant contracts, employee share acquisition scheme and third party payments
• New exemptions for wages paid for adoption/parental leave, community development employment project, and wages paid to volunteer firefighters, emergency services workers and honorary ambulance officers
• Amended provisions for grouping, employment agents, taxable termination payments and fringe benefits
• Amended exemptions for motor vehicle and accommodation allowances
• Changes to ‘wages’.

Revenue rulings
The Office of State Revenue (OSR) will release draft revenue rulings to indicate how the Commissioner of State Revenue will treat specific issues from 1 July 2008. The draft revenue rulings will be replaced with formal rulings in due course. Queensland Revenue Ruling PY 3.2 The master/servant relationship is still current.

Practice directions
A draft Practice Direction Pay-roll Tax 9.1 Remission of penalty tax and unpaid tax interest – relevant contracts has been released indicating the practice the Commissioner of State Revenue will adopt as of 1 July 2008. The draft practice direction will be replaced with a formal practice direction in due course.

For more information

• Visit the pay-roll tax harmonisation section of the OSR website 
• Subscribe to pay-roll tax email alerts
• Email Payrolltax_Harmonisation@osr.treasury.qld.gov.au
• Contact the OSR Client Contact Centre on 1300 300 734.
  

This regulation increased the Community Ambulance Cover levy for 2008-09 by 4.8% effective from 1 July 2008. This increase was done by reference to Brisbane All-Groups Consumer Price Index for the year 1 April 2007 to 31 March 2008 which recorded a annual consumer price index increase of 4.8%.

The annual levy will increase from $97.99 to $102.69 and the daily levy will increase from 26.773 cents to 28.134 cents.

The up-take has been encouraging with the number of registered self assessors lodging transfer duty online increasing from 64% in the first week to 80% by the end of the first month.

Head Assessor Faye MacCormack from Wilkinson Boynton said leaving her ‘old way of doing things’ was a bit of a worry at first but the transition to a new online system was relatively easy. To hear more about Faye’s transition to online lodgement, visit the Duties Online section of the OSR website.

Changes to long term unconditional contracts 

Returns for long term unconditional contracts must now be lodged within 30 days of becoming unconditional. For more information, view the May announcements page of the OSR website.

Payment options for duties returns 

Depositing cheques or cash directly into OSR’s bank account is not a payment option. There is a high risk that these payments will not be identified correctly. To view your payment options, visit the May announcements page of the OSR website.

For more information 

• Visit the Duties Online section of the OSR website
• Subscribe to Duties Online email alerts
• Email client.support@osr.treasury.qld.gov.au 
• Call our Client Contact Centre on 1300 300 734.